Anchors away? AMs call for a re-focus on local businesses

Not for the first time, a backbench members debate is used to discuss the foundational economy – rudimentary and everyday local businesses with short supply chains.

The Senedd:

Welcomes the Welsh Government commitment to support foundational sectors in its economic action plan.

Believes Preston City Council’s community wealth-building approach has been demonstrably successful in tackling deprivation and calls on the Welsh Government to meet with representatives of Preston City Council to discuss lessons that can be learnt.

Believes the Well-being of Future Generations Act 2015 offers significant opportunity to reframe best value in the context of procurement in Wales.

Calls on the Welsh Government to develop and trial multiple alternative models of care delivery, as part of a foundational economy approach in Wales.

“We cannot continue to give large grants to huge corporations”

Lee Waters AM (Lab, Llanelli) said Wales was at the mercy of decision-making in distant corporate HQs and, in light of possible trade barriers that may or may not come as a result of Brexit, it was time to reconsider Welsh Government grants and support for anchor companies.

“It seems to me that part of what we must do is confront the fact that we cannot continue to give large grants to huge corporations to entice them to stay in our communities when the going gets tough. The going is already tough, and we are pouring much-needed resources into a sieve, watching our investments drained away to tax havens, for little lasting return on the ground…..We’ve had record low levels of unemployment. We have record levels of foreign direct investment. And yet, many people are still profoundly disconnected, working in fragile jobs for low wages.”– Lee Waters AM

He cited the experiences of Preston in Lancashire. They were once relying on a shopping centre to boost the economy. When that fell through, the council turned attention to “locally-rooted and securely based” institutions like hospitals, colleges and universities instead of multi-nationals to act as “anchors. The result has seen procurement spending within Lancashire jump from 39% to 79%.

“The local economy has been overlooked for far too long”

David Melding AM (Con, South Wales Central) said local economies had been neglected in the over-focus on national and global economies. He did, however, caution against what he described as “mini protectionism” – there’s nothing inherently wrong in spending outside a local area.

Business rates were no longer fit for purpose and reform might have to be led at a UK level as it’s created a situation where multinationals pay less than local businesses.

Hefin David AM (Lab, Caerphilly) spoke of progress being made in Caerphilly, including a dynamic purchasing system for local contractors in housing and greater collaboration between council. However, small and medium-sized enterprises (SMEs) needed better educating on collaboration as it was often difficult to maintain across several small firms if rows break out over “who should be paid for what”.

“If we can get this right, we can positively influence the lives of large numbers of citizens, creating decent jobs whilst supporting growth and shaping the culture of the next generation of medium-sized grounded firms—that missing middle that we hear of. Many of the foundations and some of the institutions that can support the foundational economy already exist.”– Helen Mary Jones AM (Plaid, Mid & West Wales)

“We need to change perceptions of work in the foundational economy”

Replying on behalf of the government, Economy & Infrastructure Secretary, Ken Skates (Lab, Clwyd South), was bullish about his economic action plan, which has put greater focus on the foundational economy.

“I recognise the motion rightly highlights the role of care, and the opportunity that we have to blaze a trail in looking at new models of delivery across our country. We have seen some really positive developments on this front….We’ve engaged with the Wales Co-operative Centre to support the development and expansion of alternative delivery models that are far more sustainable, and serve the communities in which they are rooted.”– Economy & Infrastructure Secretary, Ken Skates

There were three priorities for him: driving up the quality of leadership and productivity in foundational economic sectors (retail, tourism, care, food & drink), changing perceptions of working in the foundational economy and “driving up the pride” people have in their local areas.